The May ISM manufacturing report is out, and it’s a miss.
The headline index unexpectedly fell to 53.2 from 54.9 in April.
Still, any reading above 50 signals growth, and this is the twelfth straight such reading.
Of the 18 manufacturing industries, 17 are reporting growth in May in the following order: Furniture & Related Products; Electrical Equipment, Appliances & Components; Primary Metals; Fabricated Metal Products; Nonmetallic Mineral Products; Machinery; Transportation Equipment; Chemical Products; Paper Products; Computer & Electronic Products; Petroleum & Coal Products; Apparel, Leather & Allied Products; Printing & Related Support Activities; Food, Beverage & Tobacco Products; Wood Products; Miscellaneous Manufacturing; and Plastics & Rubber Products. No industry reported contraction in May.
Here are some of the anecdotes that the ISM collected in its survey.
- “Increasing demand for product is creating supply and sourcing challenges.” (Food, Beverage & Tobacco Products)
- “Steel bars required for automotive applications are in high demand. Supply is very tight and prices are increasing.” (Fabricated Metal Products)
- “Aviation is recovering and outlook is optimistic.” (Transportation Equipment)
- “The improving gas prices are positively impacting our short term drilling plans.” (Petroleum & Coal Products)
- “Political issues in Russia are not yet impacting our supply of raw materials from Russian suppliers.” (Computer & Electronic Products)
- “Volumes picking up in some sectors, but profitability still elusive. Suppliers indicate similar difficulties in getting price increases.” (Chemical Products)
- “Business has remained steady. However, this month has a more subdued disposition by comparison. Price escalation has leveled off with even a few decreases on selected items.” (Wood Products)
- “Semiconductor, oil & gas are very busy.” (Electrical Equipment, Appliances & Components)
- “Business slightly up as anticipated; holding.” (Machinery)
- “Defence industry contracts are shrinking, customer is exercising minimum options, or less than minimum.” (Miscellaneous Manufacturing)
Earlier today, we learned that Markit’s manufacturing PMI climbed to 56.4 in May from 55.4 in April.
“With the exception of a brief spell in early-2010, output is growing at the fastest rate seen since prior to the financial crisis,” said Markit’s Chris Williamson.